Shareholders can choose to transfer their capital contribution or force the company to buy shares when they quit the company (also known as share repurchase). The transfer of capital contribution (that is, equity transfer) is divided into internal transfer and external transfer.
In any of the following circumstances, the company may purchase the shares of the company:
(1) Reduce the registered capital of the company.
(2) Merging with other companies holding shares of the Company;
(3) Use the shares for employee stock ownership plan or equity incentive;
(4) Shareholders request the company to purchase their shares because they disagree with the resolution of merger or division made by the shareholders' meeting;
(5) Using shares for the conversion of corporate bonds convertible into shares by listed companies.
(6) The need for listed companies to safeguard their own values and shareholders' rights and interests.
legal ground
Article 142 of the Company Law stipulates that a company may not buy its own shares. However, except for one of the following circumstances:
(1) Reduce the registered capital of the company.
(2) Merging with other companies holding shares of the Company;
(3) Use the shares for employee stock ownership plan or equity incentive;
(4) Shareholders request the company to purchase their shares because they disagree with the resolution of merger or division made by the shareholders' meeting;
(5) Using shares for the conversion of corporate bonds convertible into shares by listed companies.
(6) The need for listed companies to safeguard their own values and shareholders' rights and interests.